Sprouts Farmers Market Return on Capital Employed Overview

According to Benzinga Pro, during the first trimester, Cabbage growers market SFM earned $88.31 million, an increase of 143.75% over the previous quarter. Sprouts Farmers Market also recorded a total of $1.64 billion in sales, an increase of 9.91% since the fourth quarter. Sprouts Farmers Market earned $36.23 million and sales totaled $1.49 billion in the fourth quarter.

What is return on capital employed?

Return on capital employed is a measure of annual pre-tax profit relative to the capital employed by a business. Changes in profits and sales indicate changes in a company’s ROCE. A higher ROCE is generally indicative of a company’s successful growth and is a sign of higher earnings per share in the future. A low or negative ROCE suggests otherwise. In the first quarter, Sprouts Farmers Market posted a ROCE of 0.09%.

Keep in mind that while ROCE is a good measure of a company’s recent performance, it’s not a very reliable indicator of a company’s earnings or sales in the near future.

ROCE is a powerful metric for comparing the efficiency of capital allocation for similar companies. A relatively high ROCE shows that Sprouts Farmers Market potentially operates at a higher level of efficiency than other businesses in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital, which will generally lead to higher returns and ultimately growth in earnings per share ( EPS).

For Sprouts Farmers Market, the positive return on capital employed ratio of 0.09% suggests that management is allocating its capital efficiently. Efficient capital allocation is a positive indicator that a business will achieve more sustainable success and favorable long-term returns.

Estimated future income

Sprouts Farmers Market reported first-quarter earnings per share of $0.79/share, beating analysts’ forecast of $0.72/share.

This article was generated by Benzinga’s automated content engine and reviewed by an editor.

James V. Payne